How to upgrade your card with the same issuer
Oftentimes, you can spare adding a hard inquiry to your credit score
Award-winning writer covering consumer and small-business credit cards.
If you love your credit card company, but have outgrown your card, you can always just apply for a new card. But you also have another option: ask for an upgrade.
Upgrading can allow you to get a better card in one easy transaction and possibly without the credit ding of a hard inquiry. But it also has potential downsides, such as giving up the chance to earn a sign-up bonus on the new card.
“Weigh the pros and cons before you do it,” David Weliver, editor of Money Under 30, says of upgrading. He upgraded his American Express Delta SkyMiles card from gold to platinum several years ago when he began traveling more and wanted the perks of the higher-end card. He later downgraded again when his travel pace slowed and found it no longer worth paying a higher annual fee for those benefits.
Upgrading typically is simple when your account is in good standing, Weliver says: “It’s as easy as calling and saying, ‘I have this card and I want this one.’”
6 tips to consider when upgrading your card
- Know how an upgrade works.
- Weigh the pluses and minuses of upgrading.
- Make sure you're upgrading for the right reasons.
- Compare offers from different issuers before you call.
- Consider the credit score impact that may (or may not) result from switching.
- What to say when you call.
1. Get clear on how your issuer handles upgrades.
The process of upgrading is fairly straightforward, but can vary by issuer and individual situation, says Nessa Feddis, a senior vice president with the American Bankers Association. In general, if a current cardholder asks for an upgrade, the issuer doesn’t do a “hard pull” to check your credit, she says, as the credit limit typically stays the same and simply gets transferred from the old card to the new one. That means the issuer isn’t extending new credit, Feddis says. But specifics can vary, so it’s smart to contact your credit card company ahead of time and ask exactly how they handle upgrade requests. “Call before you pull the trigger,” Weliver says. “It will take five minutes to call and ask, ‘How does this work?’” If you’re adamant about the issuer not dinging your score with a hard pull, double check to confirm they won’t check your credit if you request an upgrade, says Nancy Bistritz-Balkan, vice president of consumer education and advocacy for Equifax .
2. Weigh the pluses and minuses of upgrading.
One of the big pros of upgrading is the chance to switch cards without a credit check. This can be helpful if you’re planning to buy a home in the next six months or so and want to avoid credit inquiries that could cause glitches or push you up to a higher mortgage interest rate. However, one major downside of upgrading is that you’ll likely miss out on any sign-up bonus that comes with the new card. These bonuses typically are reserved for new applicants, as are first-year annual fee waivers. There’s a caveat, though: some issuers send current cardholders targeted upgrade offers that may include rewards bonuses plus the chance to put off paying the annual fee for a year. If you’re thinking of upgrading, it’s definitely worth checking with your issuer to see if they have any offers you can snag. Also keep in mind that the new credit card likely will come with a new account number even if it’s not officially considered a new account, Weliver points out. This means you probably won’t escape the hassle of updating any auto pay bills you currently pay with your old card.
3. Decide whether upgrading makes sense for you.
“Make sure you’re upgrading for the right reasons,” says Bistritz-Balkan. There are situations where upgrading makes sense, Weliver says. For example, maybe you started out with a student card, but recently graduated and want to swap it for a regular card. Or, you got a secured credit card, used it responsibly, and are ready to tackle an unsecured card. In the second scenario, your issuer might even initiate the upgrade and return your security deposit after you’ve demonstrated good use of credit. For example, with the Discover it® Secured credit card, Discover does periodic account reviews.
4. Pick the card you want in your wallet.
Upgrading only makes sense if your current issuer has a card that will work well for you. Compare your issuer’s card offerings against other issuers to see if you find an even better card from another company. Review all the specifics of the card you’re considering, including annual fee, rewards earnings and redemption, purchase APR and perks such as trip insurance, free checked bags or airport lounge access. Crunch the numbers to verify that it actually makes financial sense for you to switch cards. “Make sure you’re upgrading to a card that's a better fit for you,” Weliver says.
5. Consider the effect on your credit.
How will an upgrade impact your credit score? “It’s really going to come down to how the situation is reported by the lender,” says Ethan Dornhelm, vice president of scores and analytics at FICO. The lender could report the account to the major credit bureaus as part of your current line of credit or as an entirely new line of credit, he says. When you upgrade, issuers typically classify your new card as part of the same account, Feddis says. For credit reporting purposes, this typically means the account will be listed as having been opened on the date you got the original card rather than on the date you upgraded. Length of credit history counts for 15 percent of your FICO score, so this can have a mildly positive effect on your credit, Dornhelm says. If your issuer doesn’t check your credit when you ask for an upgrade, you also will avoid the slight ding to your credit caused by an inquiry. But keep in mind that an inquiry typically will affect a FICO score by five points at the most, Dornhelm says. On the other hand, if you apply for a new credit card and keep your old account open, that can boost your credit score by lowering your utilization rate if you tend to carry a balance, which is the amount of total credit you’re using against your total available credit. The amounts owed on your accounts make up 30 percent of your FICO score, and your utilization ratio makes up the second largest piece of the FICO pie, Dornhelm says.
6. Contact your card issuer to strike a deal.
If you decide you definitely want to switch cards and you know how your issuer will handle the request, it’s time to make a call. If you get an agent on the phone, you can ask whether it’s possible to get an upgrade bonus or even an increase in credit limit. If you ask for a higher limit, though, the issuer might be more likely to do a credit check, Feddis warns. In any case, swapping your old card for a new one in a single transaction can simplify your finances and prevent you from having to juggle two accounts, Feddis says. “It just makes life a little easier,” she says.
Don't want to upgrade, but want an entirely new card? Keep your old card, too.
If you decide to just apply for a new card instead of upgrading, consider keeping your old card to retain your length of credit history, Bistritz-Balkan says.
Make periodic small purchases on your old account and pay them off in full every month. This way you can make sure your issuer doesn't close the account for inactivity, Bistritz-Balkan says.
“If you have a starter card with a history of solid payments, closing that card might not be in your best interest,” she says
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